Agency banking model


Agency banking model is a function of certain Commercial banks in kenya and as regulated by Central Bank of Kenya legislation that allows them to contract third party retail networks as Banking agent. Upon successful application, vetting and approval, these Agents are authorized to offer selected products and services on behalf of the Bank. This relationship creates an Agency Banking business model.

Definition

A Banking agent in Kenya therefore is a commercial entity that has been contracted by a commercial Bank and approved by the Central Bank of Kenya to provide specific services on behalf of the bank. This entity shall be equipped with the skills necessary to provide basic banking services according to standards set by the Bank.
This will provide the opportunity to access financial products and services at a location nearest to the customer, thus breaking down certain barriers to financial inclusion such as cost and accessibility.

Agency banking approved activities

Activities that the agency can engage are determined by the contracting bank after assessment of the applying entity. Some of these include:
Agency banking transactions are denominated in Kenya shillings.

Activities prohibited for agency banking in Kenya

Some activities are prohibited and are listed below. When an agency continues to perform prohibited activities, their contract may be terminated.
Several Kenyan commercial Banks have recorded an increased uptake of Agency banking model and as of 2016 majority of the deposits and withdrawal transactions were originating from Agents locations. Banks like Equity Bank Kenya Limited have in the recent past recorded an average of 20000 recruited agents. KCB Bank Kenya Limited has an average of 10000 Mtaani Agents who the bank depends to reach the marginalised. Cooperative Bank of Kenya also has established a successful Co-op Kwa Jirani Agents